As Washington, D.C. prepare to unleash stimulus trillions across the country, U.S. small businesses should benefit from ramped up spending and investment.
But in many corners of the country, they are staring down new local taxes and there are plenty of skirmishes in the offing. There are budget battles shaping up in state legislatures in Rhode Island, Georgia and New York, just to name a few.
The federal stimulus bill lets small business write off $250,000 in capital spending, recoup taxes for the past five years if they are not profitable, and exclude 75% of recognized investment gains on stocks held longer than five years.
For New York-based businesses, though, owners may be subject to the dread “millionaire’s tax” because their profits are often reported as personal income, along with whatever perks they get from their business. And the tax doesn’t really kick in at $1 million; it’s triggered at $250,000.
Recently, small business advocates began to lobby against the tax. Newsday reported that in East Syracuse, traveled around Albany with the advocates, telling his story.
"What I'm afraid of is that taxes such as this discourage small business owners, and they no longer strive to a higher aspiration," Michael Wheeler, an owner of a fire truck sales and repair business, said in an interview with Newsday.
Supporters of the tax say only 62,000 New York businesses would be affected, Newsday reported.
On the federal level, just under 10 percent of Americans reporting small business income make more that $250,000, the Center on Budget and Policy Priorities said in a MSNBC.com story.